SCHWAB CHARLES CORP - FORM 10-Q - EX-12.1 - August 6, 2015

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10-Q - 10-Q - SCHWAB CHARLES CORPschw-20150630x10q.htm
EX-31.2 - EX-31.2 - SCHWAB CHARLES CORPschw-20150630xex312.htm
EX-32.1 - EX-32.1 - SCHWAB CHARLES CORPschw-20150630xex321.htm
EX-32.2 - EX-32.2 - SCHWAB CHARLES CORPschw-20150630xex322.htm
EX-31.1 - EX-31.1 - SCHWAB CHARLES CORPschw-20150630xex311.htm
EX-10.366 - EX-10.366 - SCHWAB CHARLES CORPschw-20150630ex1036601eb.htm
EX-10.365 - EX-10.365 - SCHWAB CHARLES CORPschw-20150630ex103654dae.htm

THE CHARLES SCHWAB CORPORATION

 

 

 

 

 

EXHIBIT 12.1

 

Computation of Ratio of Earnings to Fixed Charges and

Ratio of Earnings to Fixed Charges and Preferred Stock Dividends

(Dollar Amounts in Millions)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

2015

 

2014

 

2015

 

2014

Earnings before taxes on earnings

 

$
567 

 

$
521 

 

$
1,051 

 

$
1,043 

Fixed charges

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Bank deposits

 

 
6 

 

 
8 

 

 
14 

 

 
15 

Payables to brokerage clients

 

 

 -

 

 

 -

 

 
1 

 

 
1 

Long-term debt

 

 
24 

 

 
18 

 

 
43 

 

 
36 

Other

 

 
3 

 

 

 -

 

 
4 

 

 

 -

Total

 

 
33 

 

 
26 

 

 
62 

 

 
52 

Interest portion of rental expense

 

 
19 

 

 
18 

 

 
37 

 

 
36 

Total fixed charges (A)

 

 
52 

 

 
44 

 

 
99 

 

 
88 

Earnings before taxes on earnings and fixed charges (B)

 

$
619 

 

$
565 

 

$
1,150 

 

$
1,131 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratio of earnings to fixed charges (B) ÷ (A) (1)

 

 
11.9 

 

 
12.8 

 

 
11.6 

 

 
12.9 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratio of earnings to fixed charges, excluding bank deposits and payables

 

 

 

 

 

 

 

 

 

 

 

 

to brokerage clients interest expense (2)

 

 
13.3 

 

 
15.5 

 

 
13.5 

 

 
15.5 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total fixed charges

 

$
52 

 

$
44 

 

$
99 

 

$
88 

Preferred stock dividends (3)

 

 
37 

 

 
35 

 

 
55 

 

 
48 

Total fixed charges and preferred stock dividends (C)

 

$
89 

 

$
79 

 

$
154 

 

$
136 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratio of earnings to fixed charges and preferred stock dividends (B) ÷ (C) (1)

 

 
7.0 

 

 
7.2 

 

 
7.5 

 

 
8.3 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratio of earnings to fixed charges and preferred stock dividends, excluding

 

 

 

 

 

 

 

 

 

 

 

 

bank deposits and payables to brokerage clients interest expense (2)

 

 
7.4 

 

 
7.8 

 

 
8.2 

 

 
9.3 

 

(1)

The ratios of earnings to fixed charges and earnings to fixed charges and preferred stock dividends are calculated in accordance with SEC requirements. For such purposes, “earnings” consist of earnings before taxes on earnings and fixed charges. “Fixed charges” consist of interest expense as listed above, and one-third of rental expense, which is estimated to be representative of the interest factor.

(2)

Because interest expense incurred in connection with both bank deposits and payables to brokerage clients is completely offset by interest revenue on related investments and loans, the Company considers such interest to be an operating expense. Accordingly, the ratio of earnings to fixed charges, excluding bank deposits and payables to brokerage clients interest expense, and the ratio of earnings to fixed charges and preferred stock dividends, excluding bank deposits and payables to brokerage clients interest expense, reflect the elimination of such interest expense as a fixed charge.

(3)

The preferred stock dividend amounts represent the pre-tax earnings that would be required to pay the dividends on outstanding preferred stock.

 

 

 

 

SCHWAB CHARLES CORP Reports